The US ambassador to China expressed caution on Tuesday over hopes for reform under Beijing’s new leadership and said the mainland should turn to Hong Kong for inspiration.

Gary Locke told an economic conference in Hong Kong that the US-China relationship remains “fundamentally very, very strong” but said the world’s second-largest economy could only benefit from further liberalisation.

“Hong Kong is an excellent example of what can be done and how important it is to lead in the economic realm with the principles of openness, freedom and transparency,” he told the conference, organised by US bank Goldman Sachs.

“It is also an example that China can learn from and in doing so, optimise China’s own progress and development,” he said.

Locke, a former US commerce secretary and the first Chinese American to hold the post, remained cautious when asked about the prospects of reform under China’s newly elected Communist Party leader Xi Jinping, who is set to take over as president in March.

“I believe everyone inside and outside of China is very hopeful but time will only tell, so we’re going to have to wait for several months or even a year to really see what the priorities are (for the new leadership),” he said.

Xi was seen to be signalling a push for economic reforms when he chose to visit the southern boomtown of Shenzhen in his first official trip as the ruling party leader in December, where he vowed to continue “reform and opening”.

But Locke said that many industries had expressed concerns over restrictions on investment in China, which they felt were “very troublesome”.

Foreign direct investment in China declined for the first time in three years last year, official data showed, and some US businesses have linked it to investment barriers.

Ownership restrictions are imposed in a large number of sectors, although Beijing has moved to ease these limitations.

“I think we really need to try to push for even further opening because it’s in the economic self-interest of the Chinese people and the Chinese government,” Locke said.

A third-generation Chinese American whose grandfather emigrated to the US, Locke created a buzz in Beijing when he took the US envoy role in 2011 and was nicknamed “the backpacker” for his frugal travelling habits.

He arrived in Beijing carrying his own luggage and in a regular car, with little of the ceremony that usually surrounds Chinese dignitaries abroad.